The proposed study will describe and examine the patterns and nature of the diffusion and adoption of magnetic resonance imaging (MRI) technology. MRI is the first major new equipment embodied medical technology to emerge in the new Medicare prospective payment DRG environment. This study will examine the role of individual, organizational, regulatory and competitive factors surrounding the adoption decision, and the timing and cost implications of that decision. The competitive role of free-standing imaging organizations (FIOs) in the diffusion of MRI technology also will be studied. A multi-disciplinary approach combining statistical data analysis, formal analytical modeling and case studies will be used. Data to be analyzed will include AHA and U.S. Census data for all metropolitan statistical areas and hospitals in those areas. In addition, the project will assemble a survey of all adopters and selected non-adopters. It also will include a set of intensive, in-depth case studies, and a rigorous tracking of the real and perceived evolution of the technology itself. This work will describe adoption and diffusion of medical technology as it occurs in a new environment, and will analyze the evolution of this important technology over time. The evolution of FIOs will be examined. This work will result in new models and theories of technology adoption and diffusion. The findings of the research will be assessed for policy implications for managing the diffusion of new medical technologies.